Creditors War Over Attorney-Enron Links: Judge Asked to Disqualify Law Firm

NEW YORK, March 22 -- Almost from the moment Enron Corp. declared bankruptcy in December, the businesses it owed money to have been feuding over how to divvy up the remains of the once-mighty Houston energy company. And now it's getting personal.

Just this week a former Enron energy-trading partner asked the judge in the case to disqualify the law firm for the creditors' committee, saying its attorneys had "myriad conflicts" because Enron and a number of Enron's major banks were clients.

EXCO Resources of Dallas said in court papers filed Tuesday that Milbank, Tweed, Hadley & McCloy was "quite possibly the worst choice" as creditors' counsel, with the possible exception of Vinson & Elkins. The Vinson firm was has been accused of failing to vigorously investigate the accounting issues that eventually led to Enron's collapse.